Tax Rates on Builders & Developers

Mode and Manner for Payment and Collection of Tax from Builders

• Builder’s Obligations:
  • After obtaining building plan approval and NOC to sell, the builder must:
    • Submit a copy of the building plan online to the Chief Commissioner.
    • Provide evidence of paying 5% of the estimated total tax.
    • Calculate the final tax liability based on the covered area and rates in Division VIIIA of the Income Tax Ordinance.
• Chief Commissioner’s Responsibilities:
  • Verify the builder’s calculations and conduct necessary inquiries.
  • Issue an online schedule of advance tax installments.
• Payment Schedule:
  • The tax is paid in equal installments over four-month periods.
  • The payment period starts from the issuance of the NOC to sell and ends upon project completion.
  • Builders can opt for a lump sum payment instead of installments.

Application For Issuance Of Schedule Of Installments For Payment Of Tax U/S 7c Of The Income Tax Ordinance 2001 can be filed in the manner provided in SRO 787 Of 2016

Process Summary:

1. Builder obtains building plan approval and NOC to sell.
2. Builder submits building plan, pays 5% initial tax, and calculates total tax liability.
3. Chief Commissioner verifies the builder’s calculations and issues a payment schedule.
4. Builder pays tax in installments or as a lump sum.